Earnings before interest, tax, depreciation and
amortization declined to 336.9 million euros ($440.8 million)
from 361.4 million euros a year earlier, as revenue declined 0.6
percent to 1.05 billion euros, the Vienna-based company said in
a statement today. The average analyst estimate for Ebitda was
323.8 million euros, according to data compiled by Bloomberg.

“Bulgaria was impacted by a deterioration in pricing as
well as the effect of mobile termination and roaming rate
cuts,” the company said in its quarterly report. In Austria,
customer migration to all-in tariffs had a negative effect on
monthly fee and traffic revenues, it said.

Intense domestic competition in mobile and fixed-line
networks by units of Deutsche Telekom AG, Hutchison Whampoa Ltd.
and Liberty Media Corp has been weighing on Telekom Austria’s
earnings for years. Growth in its eastern European units slowed
as economies in Croatia and Bulgaria contracted, crimping demand
for mobile phone services. That prompted the company to cut
costs and reduce shareholder payouts.

Austria’s biggest-ever spectrum auction in September could
bring back a fourth mobile competitor after the number of
operators was reduced by Hutchison Whampoa’s purchase of Orange
Austria last year. Deutsche Telekom AG is the third mobile phone
company in Austria.

“If Hutchison plans to continue to aggressively win market
share, the benefits of consolidation may be delayed,” Michael
Zorko, a London-based analyst for Exane BNP-Paribas, wrote in a
note to clients on May 1.

Telekom Austria, whose biggest shareholders are the
Austrian government and Mexico’s America Movil SAB, reiterated
it sees about 4.1 billion euros revenue in 2013 and that it will
invest about 700 million euros, excluding spending for spectrum.
The company plans a five cent dividend for 2012 and 2013,
matching Bloomberg estimates.